Petrobras HVO diesel opens rivalry with biodiesel

Brazilian state-controlled Petrobras completed refinery tests on its patented hydrotreated vegetable oil (HVO) production technology, setting off a rivalry with the country's biodiesel producers.

Petrobras said it successfully converted 2mn liters (12,580 bl) of soybean oil into 40mn l of HVO diesel at its Repar refinery in Parana state.

The final product meets all technical requirements, Petrobras said. "The new fuel reduces greenhouse gases more than current biodiesel," Petrobras downstream director Anelise Lara said in a statement.

In order to market the advanced biofuel, Petrobras will have to secure authorization from hydrocarbons regulator ANP, which has the final word on how the fuel is classified. This will determine whether the fuel competes on the market with biodiesel or with conventional diesel. Before the Covid-19 pandemic hit, the ANP had been expected to issue regulations on the new biofuel this year.

Petrobras maintains that HVO should be classified alongside biodiesel to meet the country's 12pc blending mandate. The company added that HVO does not use glycerine in its production process and improves the performance of diesel motors, unlike conventional biodiesel.

But the biodiesel industry, which has invested heavily over the past decade in capacity to meet the mandate, is arguing that HVO should not be classified as biodiesel.

"HVO and biodiesel should not be treated as equals," according to Juan Diego Ferres, president of biofuels association Ubrabio.

Despite its environmental advantages, HVO diesel is more akin to petroleum-based diesel and should not be subject to the same regulations as biodiesel, Ferres said.

Petrobras' HVO bio-jet fuel, which also uses the same vegetable oil feedstocks and refining technique as its HVO diesel, is also awaiting regulatory approval. The bio-jet fuel opens up a potential export market populated by foreign airlines looking for sustainable fuel alternatives to conventional jet fuel to reduce their carbon footprints, according to Petrobras.